USE/OCC TX-SCHOOL SUPPLIES

104th Regular Session Introduced by Tony McCombie

Illinois would create a seven-day annual sales tax holiday (Aug 1-7) exempting qualifying school supplies from state sales and use taxes to ease back-to-school costs.

Referred to Rules Committee

Summary — HB 2798 (Illinois) — Sales Tax Holiday for School Supplies

Status: Introduced Feb 6, 2025; passed both chambers; transmitted to Governor May 7, 2025; vetoed by Governor May 13, 2025.

Note on numbering: The file materials include text from two different states (an Arizona bill with the same number on zoning and supervised injection sites). This summary focuses on the Illinois HB 2798 (Rep. Tony M. McCombie), titled in the text as a change to use/occupation tax law to create a school-supplies sales tax holiday.

Key provisions

Amends the Use Tax Act, the Retailers' Occupation Tax Act, and the State Finance Act (see statutory cites in bill: e.g., 30 ILCS 105/6z-18, 6z-20; 35 ILCS 105/3-6, 3-10, 9; 35 ILCS 120/2-8, 2-10, 3).

Establishes a sales tax holiday covering school supplies during the first seven days of August each calendar year (i.e., August 1–7).

During that 7-day period, qualifying school-supply items are exempt from the State’s sales and use taxes (and corresponding administration provisions are adjusted).

Effective immediately upon enactment (per language in the introduced bill).

Who is affected

Consumers: Individuals and families purchasing qualifying school supplies during the holiday would pay no state sales/use tax on those items.

Retailers: Required to implement tax-exemption procedures during the holiday period; must be able to identify qualifying items and adjust point-of-sale tax collection and reporting.

State and local governments: Experience reduced sales-tax receipts for the exempted items sold during the holiday period; distribution and accounting provisions in the Local Government Tax Fund and related allocations are amended to reflect holiday-period treatment.

Tax administrators (Department of Revenue): Increased administrative responsibilities for guidance, reporting, and potentially auditing holiday exemptions.

Fiscal and administrative impact

Revenue reduction for the state and affected local governments limited to tax on qualifying items sold during the 7-day window. The bill text does not include explicit revenue offsets or dollar estimates.

Administrative burden on retailers and the Department of Revenue to define qualifying items, implement point-of-sale exemptions, and reconcile allocations to local governments (the bill amends distribution language in the State Finance Act to address holiday-period allocation mechanics).

Procedural / timeline highlights

Introduced in Illinois House: Feb 6, 2025 (Rep. Tony M. McCombie).

Committee and floor actions: progressed through committee hearings and votes; reported and placed on calendars; passed both chambers (dates in April 2025 per bill history).

Transmitted to Governor: May 7, 2025.

Governor vetoed the bill: May 13, 2025 — bill did not become law as of that veto.

Notes and caveats

The bill text excerpt does not disclose the precise statutory definition of “school supplies” or exclusions (e.g., clothing, electronics) — those definitions would determine scope and fiscal effect and typically appear in the full bill language or implementing rules.

Because the Governor vetoed HB 2798 on May 13, 2025, it is not in effect unless the General Assembly subsequently overrides the veto or reintroduces similar legislation.

Bill